Topic: ECB introduces Negative deposit rates for commercial banks - good for bitcoin? (Read 845 times)
June 07, 2014, 01:00:36 AM
People who hold BTC in EU will be reluctant to changed to fiat. For those who got cash in bank would rather to buy BTC and keep it and wait for the price increase.
June 06, 2014, 03:14:26 PM
Well, this just means that more money will be invested, and because BTC is one potential Investment --> yeah it will profit from this in some way.
Other than that, BTC is very uncorrelated to normal markets.
Other than that, BTC is very uncorrelated to normal markets.
June 06, 2014, 03:07:29 PM
we already have negative interest rates
i pay $4/month for my chequeing account
i pay $4/month for my chequeing account
June 06, 2014, 08:24:46 AM
In the free market, you can not have zero or negative prices. (Look, I can sell you a bitcoin, just give me a bitcoin address, then, I will give you a 100 dollar note also...)
The interest is the price you pay to be able to spend other peoples money before you have earned, or conversely what receive after you have forgone your possibility to spend for a period of time. The interest rate is decided by the market, and if it is well oiled, it should be the same everywhere.
So what is going on?
When you lend to the bank, what you get back in addition to the principal is
a) the basic interest as above.
b) plus the risk leaving the money outside of your control
c) minus the cost for the bank of managing your money (assuming you believe they are good at it).
This is the composition of the rate casually referred to as "interest". So if the cost is larger than the basic interest, and the risk is very low, you have to pay. This is not far fetched, think of the cost and risk of storing the money or gold in your flat.
The other thing to note is that the product that Draghi talks about, deposits of excess reserves from banks to the European Central Bank, is far from a the free market. The banks are grossly over-regulated, with threats of exclusion, explicit and unspoken guarantees, random penalties, and suspect settlements.
The negative interest rate, whether it will have some volume or not, is mainly a marketing ploy. What is more interesting for us is Draghis plans to expand credit and therefore the effective euro money supply. He mentioned a number, but even after several years he is only talking (still, his words seem to have some effect on the markets).
The interest is the price you pay to be able to spend other peoples money before you have earned, or conversely what receive after you have forgone your possibility to spend for a period of time. The interest rate is decided by the market, and if it is well oiled, it should be the same everywhere.
So what is going on?
When you lend to the bank, what you get back in addition to the principal is
a) the basic interest as above.
b) plus the risk leaving the money outside of your control
c) minus the cost for the bank of managing your money (assuming you believe they are good at it).
This is the composition of the rate casually referred to as "interest". So if the cost is larger than the basic interest, and the risk is very low, you have to pay. This is not far fetched, think of the cost and risk of storing the money or gold in your flat.
The other thing to note is that the product that Draghi talks about, deposits of excess reserves from banks to the European Central Bank, is far from a the free market. The banks are grossly over-regulated, with threats of exclusion, explicit and unspoken guarantees, random penalties, and suspect settlements.
The negative interest rate, whether it will have some volume or not, is mainly a marketing ploy. What is more interesting for us is Draghis plans to expand credit and therefore the effective euro money supply. He mentioned a number, but even after several years he is only talking (still, his words seem to have some effect on the markets).
June 06, 2014, 05:02:00 AM
It is really easy to accept bitcoins. Change is easy give it a couple weeks.
June 05, 2014, 08:07:47 AM
Just announced a minus 0.10 deposit rate for commercial banks as a 'incentive' for them to invest.
Hard to do QE with such variance between member countries.
Hard to do QE with such variance between member countries.
In the long term its good for bitcoin. All this debts and theft is leading to a destruction of the EU.
June 05, 2014, 07:55:40 AM
Just announced a minus 0.10 deposit rate for commercial banks as a 'incentive' for them to invest.
Hard to do QE with such variance between member countries.
Hard to do QE with such variance between member countries.
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